LIABILITY OF CHARITABLE DONATIONS TO DUTY (Hansard, 16 July 1969)

§ Mr. Terence L. Higgins (Worthing)
I beg to move, That the Clause be read a Second time.

§ Mr. Speaker
I suggest that with new Clause 31 we take new Clause 34—"Liability of charitable donations to pool betting duty"—and new Clause 45—"Pool betting duty—charitable exemption".

§ Mr. Higgins
New Clause No. 31 is designed to protect the existing position of a number of charities concerning their liability to betting duty on pools which they run for charitable purposes.
Most new Clauses and Amendments on Finance Bills fall into three categories: a point of substance, what is normally described as a probing Amendment, or perhaps a drafting Amendment. New Clause No. 31 has something of the element of all three. It most certainly includes an important point of substance, on which I hope we shall get a sympathetic reply from the Financial Secretary, because it deals with a serious matter concerning a number of large charities in this country.
It is also a probing Amendment, because it seeks to clarify the existing law on the liability of these charities to betting duty.
It is also a drafting Amendment, because we seek to put forward a form of words which will remove any possible doubt about the liability of a charity to betting duty on that part of its contribution which goes directly from the contributor to the charity.
I stress that I am not necessarily wedded to the particular wording of new Clause No. 31. It may be that the wording of new Clause No. 34 or new Clause No. 45 may be preferable. It seemed that this was a matter of such urgency 681 that we should try a number of different formulations in the hope that the Government would find that one was precisely right and could be accepted as it stands. On Report stage of a Finance Bill, if the wording is not right there is no subsequent occasion in another place where we can get it right. Therefore, we thought it worth while having three attempts at the wording in the hope that one might be acceptable to the Government. I cannot believe that the Financial Secretary, if he is to reply, will not feel able to accept one of these new Clauses.
The purpose of New Clause No. 31 is not to reverse a decision of the House of Lords in a particular case concerning the liability of charities to pools betting duty, a decision which was made at the beginning of July. However, it will be helpful to spend a short time spelling out some of the points involved in that case, because this will bring me to the main point at issue in the new Clause.
The effect of the recent decision of the House of Lords has been severely to reduce the amount of money available to a number of charities—in particular the Spastics Society. Indeed, the sums involved are very large—about £900,000.
The course of this case has been described in various newspaper reports. Essentially what happened was that in the 1964 Act an attempt was made by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan), under the Chancellor of the day, to tighten up the law concerning tax-free pools expenses. The aim was, as far as any shilling stake was concerned, to try to include 7½d. of that stake. Effectively, a number of charities then divided their operations into two separate companies. They felt that in this way they would be able to escape the full impact of the duty on that part of their operations which would normally have been taxable. They still, however, were certain in their minds that the 2d. contribution which the charity received, as against the contribution which went into the pool, would be on perfectly safe ground.
The House of Lords, after a four-year legal battle, has now decided that the pools company operating on behalf of the charity shall be liable for 10d. out of every shilling, as far as the duty is con- 682 cerned, not merely 2½d. As a result, about £900,000 has been lost.
This is relevant to the point which I wish to make now, in the sense that it clearly is a severe blow against one of the major charities in this country. Not only is it a blow against that charity, where the revenue from its pools operations contribute about half its total income, but it is also a blow against a number of smaller charities which depend for an important part of their revenue on such pools.
National Spastics Week took place the week before last. I, in common with many other hon. Members of this House, attended some of the functions taking place in that week. The general attitude of the voluntary workers organising the events on that occasion to raise sums which, while significant and very good, were small compared with the sum that I have just mentioned, were incredulous that any Government should feel it right to pursue this tax in the way that they have. I make no comment on that, because it is not within the scope of the new Clause. None the less, there is a grave danger that we may discourage voluntary work in this sphere, which is very important.
The point at issue, in the light of the situation that I have just outlined, is that there is now some doubt whether the Spastics Society and the pool which is operated on its behalf and on behalf of other charities will be liable not only to the duty which I have already described but also on the 2d. in the shilling which is an actual donation to the charity itself.
It should be made abundantly clear that this was not the intention of those who tightened up the legislation in this general field in 1964. I want to quote briefly from a letter written by my hon. Friend the Member for Farnham to the former hon. Member for Bristol, North-West. He stated the position very clearly when he said: This means that of the 1s. paid weekly by entrants only the 2d. donated by them to charity will not be chargeable with duty. There is now some doubt whether that 2d itself is not in some danger. That is why we felt it right to table this set of new Clauses.
I should explain why some doubt has arisen in this matter. Following the 683 result of the High Court case the spastics organisation responsible for running the pool received a letter from Her Majesty's Customs and Excise dated 15th May, saying: I am directed by the Commissioners of Customs and Excise to refer to your letter of 11th March and to acknowledge receipt of your copy of the rules of the Spastics League Club, which are enclosed. I am to inform you that duty is payable on a donation unless a rule can be shown which indicates that it is made voluntarily. That indicates that the Inland Revenue intends to pursue this matter still further and to take into tax even the donations made to the Spastics Society at the moment.
We felt that the House would not wish to see this happen and in order to put the matter beyond any doubt we have tabled these new Clauses in a spirit of some urgency, because this is an important and considerable matter. If the 2d. in the Is. were to become taxable at the duty of 33⅓ per cent. the sum involved for the spastics would be about £500,000. It would have £500,000 less to spend in doing its work of helping spastics. If the issue were taken back to the 1964 Act the loss that the society would suffer as a result of the point that I have just mentioned would be £2½ million. Again, its work would be inhibited to that extent.
It is not necessary for me to describe in detail the tremendous amount of good work which this charity—like many others affected by this point—carries out. Many hon. Members will have had experience of it in their own constituencies. It is not simply a question of certain groups being affected—for example, spastic children, for whom we have a tremendous amount of sympathy; it is also a question of adult spastics, and especially their employment and training. Here again, the society does a great amount of good work.
The essential point to be made is that neither local authority help nor National Health Service help is adequate to deal with this problem. In many cases the National Health Service does not provide adequate facilities. The Daily Telegraph, in an article published on 12th July, pointed out that the £900,000 loss was likely severely to curtail the training of 6,000 young spastics, and that the loss of £500,000 would probably bring the 684 spastics' plans to a halt. Yet most local authorities have facilities to train only mildly afflicted spastics. Many of these people are subnormal. Out of the 100,000 spastics probably about 40,000 are subnormal. Of these about half are severely subnormal. Local authorities can seldom make any provision to help them, and the facilities available are simply inadequate.
7.15 p.m.
The Spastic Society carries a burden which neither the National Health Service nor local authorities are carrying. This is a matter of tremendous importance in terms of human happiness. Even now the Spastics Society can help only about 20,000 out of the 100,000 spastics. There is a tremendous need for expansion. For that reason it seems totally wrong that on top of the set-back that has already been caused by the House of Lords' decision the society should feel that there is some danger of its plans virtually being stopped dead in their tracks.
The problem is not simply one of help for children and adults; much research is carried out. About £300,000 has been spent on fundamental research to help spastics. Over 100 social centres for spastics have been provided by the society, which makes it one of our major charities. I do not wish to go into details of these cases; they are sufficiently familiar to the House.
My argument is threefold. First, if this doubt is not cleared up it will severely affect the morale of the voluntary workers, who do a tremendous job. Secondly, there seems no doubt that the 1964 Act, as originally drafted, was not intended to lead to a situation in which the 2d. donation to the charity was taxable. There is no question, in any sense, of the Government's losing revenue; it is simply that they will not get extra revenue that they did not intend to get and did not expect to get, and which I hope the House will feel they should not get.
For those reasons, I hope that the Financial Secretary will find it possible to accept whichever Amendment is best drafted. I find it difficult to imagine that anyone in this House could think of a better use for the money which the Revenue might otherwise acquire than that to which it is already being put by 685 the society. I hope that the House will feel that one of the new Clauses should be accepted.

§ Mr. Harold Lever
It may be for the convenience of the House if I rise early in the debate. I am not precluding the comments of other hon. Members. This matter has been widely publicised and even more widely misunderstood. The House of Lords decision was not a decision to tax spastics, or any charity; it was a decision which applied to a commercial firm running pools the appropriate law relating to the pool duty on the operations of that firm in respect of its pool. It had nothing whatever to do with taxing voluntary donations to the Spastics Society or any other charity.
These voluntary donations are not and never have been liable to pool betting duty. I want to make that absolutely plain. Voluntary donations are not, never have been and—as my right hon. Friend the Chancellor prompts me to say —will never be, as far as he is concerned, liable to pool betting duty. Nobody need have the smallest anxiety about that.
What was decided by the House of Lords was simply—as might have been decided in relation to any other commercial promoter of a pool—the appropriate rate of pool betting duty, having regard to the circumstances of the pool operation. The amount decided by the House of Lords would have been the same if I or if you, Mr. Speaker—if one can conceive of your taking time for the running of a pool—had been running the pool in a commercial way. This was the appropriate duty. That was what the House of Lords found. It was a duty payable by the pool promoter, calculated in accordance with the provisions of the Act in precisely the same way as is done for every other pool promoter. It was not a duty on spastics.
It has been said in the Press that as a result of the case the Spastics Society will lose £900,000. We understand that the promoters of the pool had said that if the House of Lords case had gone in its favour it intended to make a contribution of something like £900,000 to the spastics. What that amounts to saying is that if something in the region of £12,500,000 of pool duty had been avoided by the particular operations of this pool, £900,000 686 would have been given to the Spastics Society.
We cannot, in operating the collection of the pool duty, have regard to what people intend to do if they are fortunate enough to find themselves exempt from pool duty should they carry on operations in a particular way. The respondent, Top Ten Promotions Limited, carried on its operations in a somewhat complicated way, as it was perfectly entitled to do, seeking, and hoping, that the consequence would be that it would be relieved of several millions of pounds of pool betting duty—a very laudable and interesting expectation from its point of view.
On the other hand, from the point of view of the Revenue it was our duty to apply the law to see if we could collect the duty as we would have collected it from any other person. The fact that this company has been disappointed by the House of Lords decision and that its disappointment will be reflected in a lesser donation to the Spastics Society or any other charitable cause, is not a ground on which we could possibly have held our hand in seeking to apply the ordinary rules of pool betting duty. The House must be clear about this. Charity is one thing and pool betting duty is another.
This is not the charity operating a pool. Even if it were, it must pay the full betting duty just as any other pool pays it, otherwise there may not be any pool betting duty. Pools will be run exclusively by charities. If the House wants this it can make a solid and coherent decision to this effect. Someone must table a new Clause exempting charities from duty.

§ Sir John Foster (Northwich)
We have done so.

§ Mr. Lever
The hon. and learned Member for Northwich (Sir J. Foster) tells me that there is a new Clause which totally exempts charities from the duty. That must be new Clause 45, which is being discussed with this other new Clause. What has to be done is to exempt all charities and allow them to carry on pools without paying duty, in which case it is only a matter of time before the other pool promoters would be out of business, because they could not compete with a charity wholly exempt from pool betting duty, as the prizes available to the charity would be vastly 687 larger, and the odds vastly larger than those available to the commercial firms.
We could equally well exempt them not merely from pool betting duty but horserace betting duty so that any charity could conduct a bookmaking business and be exempt from the 5 per cent. duty. There would soon not be any bookmakers left in competition. Once we exempt them, not from the income tax on profits, but from the duty on turnover, there would not be anyone else operating. It may be very desirable in the interests of charity, but it certainly would wipe out the receipts from pool betting duty.
I do not want to labour the point unduly but I do want to make it absolutely clear that the House of Lords decision was not one to tax spastics or any other charity. It was not the decision of the Lords or the Revenue that voluntary donations should be liable to full betting duty or to any duty of any kind. These voluntary donations are not, have not been and will not be liable to duty. Anyone who wants to give money to the Spastics Society voluntarily will have our total encouragement and total exemption from any kind of duty. If they want to give it to any other charity too, so much the better. It has nothing to do with the point which has received publicity. What we are asking the House to say here is that when we have a pool betting duty we cannot have exempt persons operating because very soon there will be no one else left and we will have to abandon the whole duty.

§ Mr. Higgins
I hope I have made it clear that we were not seeking to over-rule the House of Lords decision in any way. I was merely putting it in that context to emphasise that there was already considerable dispute about this. It would be a very great deal worse if the Inland Revenue, on the basis of the letter I quoted, sought to extend the tax even to the contributions to charities.

§ Mr. Lever
I did not allege that the hon. Gentleman said anything unfair or inaccurate. There has been a great deal of newspaper and other comment upon this matter and I was very anxious that the House should know the position about voluntary donations. Where there is a simple voluntary donation to charity, it 688 is not and will not be subject to any form of duty. Voluntary donations to charity and arrangements which appear to give a flavour of voluntary donation to charity but which are not voluntary donations and which result in the avoidance or reduction of pool betting duty, are two different matters. I give in unqualified terms the assurance about voluntary donations to charity.
Purely voluntary donations have been and will remain wholly exempt from pool betting duty or any other duty. I will not go into all the mechanics of this or the House of Lords decision unless there is some interest in my doing so. The House can rest assured that we are applying pool betting duty in the ordinary way, as the House decided. Unless the House feels, against the advice I have given, that we ought to allow charities to operate without any pool betting duty or with a reduced duty, then the House must reject the new Clause.

§ Mr. Higgins
I am merely trying to save time. The right hon. Gentleman has not taken the central point. Suspicion has arisen that the Inland Revenue intends to tax the 2d. voluntary contribution, and the basis for that is the letter I have quoted. It is now insisting that the duty is payable on the donation unless a rule can be shown which indicates that it is made voluntarily. If there is no such rule it may still be made voluntarily and there is a grave danger that this case may be fought for another four years by the Revenue.

§ Mr. Lever
I was trying to spare hon Members some of the details. These suggestions are not in accordance with the facts, which are as follows. Around the turn of this year the pools promoters in this case introduced revised rules under which weekly payments went up from 1s. to 1s. 6d. and the charitable contribution was increased to 2.7d. per entrant per week for three weeks out of a four-week cycle. Because of the unusual arrangement it was not clear how a club member could voluntarily make a payment of 2.7d. The position was queried by Customs and this produced, I am sorry to say, an evasive reply from the promoters. As a result the query was repeated.
Some weeks ago a local Customs officer reminded the promoters that the point was still outstanding and since 689 then a letter has been received from the firm's solicitors. No reply has yet been given to the Customs, but it appears that the voluntary donation has now to be paid, or forgone, together with the club payments, the two together totalling a round number of pence. In these circumstances the voluntary donation will be exempt from duty. No one has to worry his head about what is a genuinely voluntary donation. I do not like to use tendentious language, but if there is no unnecessary complication over the voluntary payment in such a way as to make it clear that it is not a voluntary payment but merely an attempted circumvention of duty, then no problem arises. If someone wants to make a voluntary payment they can do so and it is absolutely free from duty and will remain so. I cannot make it clearer than that.

§ Mr. Higgins
There is doubt about this matter. Will the right hon. Gentleman accept whichever of the Amendments he feels will meet the situation?

§ Mr. Lever
I cannot see where the doubt is. I have assured the House that if any purely voluntary payment is made by pool promoters to a charity which is a genuinely voluntary payment to a charity, be it the Spastics Society or any other, in no circumstances will pool duty be collected. What more comprehensive assurance does the hon. Gentleman, or even the hon. and learned Member for Northwich, want?

§ Sir J. Foster
Would the right hon. Gentleman point out where the word "voluntary" appears in the Statute? The difficulty has arisen because the Customs have introduced the word "voluntary".

§ Mr. Lever
We have accepted that the donations given in the form now communicated to us are exempt from duty. The only thing which can be taxed is, not payments made to a charity, but payments which are contributions to a football pool in such form as to be liable to pool betting duty. If they are not contributions to a football pool and hence liable to pool betting duty they will not be taxed. If they are contributions to a charity they will not be taxed.
Acceptance of the new Clauses, far from clearing up the matter, would complicate it still further. The present law is perfectly simple. The ruling which I 690 have given seems to me absolutely clear and need not trouble anybody. A voluntary contribution to charity and not a voluntary contribution to a football pool is not liable to pool betting duty.

§ Sir J. Foster
The confusion has arisen because of the Financial Secretary's definition of "voluntary". He shied off the question when I asked him where the word "voluntary" appeared in the Statute. He said that anything which was not a contribution to pool betting was voluntary. That may be one way of expressing it, but it makes the whole matter unclear. The Customs say, "If it was not voluntary you must pay". The Statute does not say that. The Customs say, "There must be a rule that this is voluntary." I do not know of charities soliciting donations which say in, perhaps, Rule 82 that contributions must be voluntary.

§ Mr. Lever
The hon. and learned Gentleman is far too subtle and too intelligent not to have taken my point. Use of the word "voluntary" is another way of saying that they are genuine. One can make contributions which one has to make as part of the pool itself. They are not contributions to charity but are contributions to the pool which one has to make to participate in the pool.

§ Sir J. Foster
I take the right hon. Gentleman's point, but the way in which he puts it only makes the situation more difficult.
The Customs letter says: …that the duty is payable on the donation unless a rule can be shown which indicates that it is made voluntarily". The best rule for showing that it is made voluntarily is that which says that when making a donation the subscriber shall subscribe to a statement on oath before a commissioner for oaths that it is made voluntarily. The letter cannot mean that. Therefore, what does it mean?
The rule then says that in making donations to the club it must be indicated that on no account must the twopence go to the pool betting promoter.

§ Mr. Lever
What the word "voluntary" means—

§ Mr. Speaker
I hesitate to intervene. We are on Report, which is rather more formal than Committee. I know that an 691 attempt is being made to shorten the debate, but the interventions seem to be lengthening it.

Mr. Levers
Perhaps I can shorten the debate by pointing out that what we meant by "voluntary" was in conformity with the wording of the 1964 Act, which refers to benefit so provided by means of payments made for the purpose by persons making bets and are not payments without which bets cannot be made.

§ Sir J. Foster
That was my next point. The right hon. Gentleman says that the situation must not be complicated by considering whether it is voluntary. I agree that this is a little bit of a tease of the right hon. Gentleman. We want to be clear that when 2d. is sent to the spastics club, although it is sent in the same bundle as the 10d., which goes to the pool promoters, the 2d. goes off that way and the 10d. goes in respect of pool betting. In those circumstances, there is no danger of the twopence being caught. How are people to frame a rule which indicates that a payment is made voluntarily? It is difficult for the Government to say, "Our civil servants made a mistake". If they cannot agree, will they draft a rule about payments not being made voluntarily?
I hope that the Chancellor of the Exchequer will consider the content of new Clause 45 for next year. The Financial Secretary made a very good argument against pools being run by charities, which would exclude all pools. All that new Clause 45 proposes is that when a charity runs a pool it will have to pay betting duty on the amount which goes to the people who win the prizes, but that the part which goes to the charity will not be taxed. We would not press the point this year because it involves a new principle.
I should like to deal with the point about 40 per cent. of spastics being subnormal. There is a wonderful documentary film sponsored by the Government which shows spastics during their ordinary lives. The mistake which many people make is to assume that, because a spastic talks with a distorted face and has great difficulty in expressing himself, he is mentally retarded. The point of the film, produced by an organisation called, I think, Samaritan Films, which I hope 692 many hon. Members will see, because it is very heartrending, is to depict the lives of two or three spastics. It lasts for about 35 minutes. It shows them speaking normally. That only reinforces the need there is for a great deal of money to be spent on these people quite outside the National Health Service.
Coming back to the main point, I think that the right hon. Gentleman and we on this side are agreed that the 2d. will not be taxed. We—that is, the Spastics Society—were frightened by this letter from the Customs and Excise that we might have another case going to the House of Lords where it would be argued that the 2d. went in with the 10d.

§ Mr. Robert Cooke (Bristol, West)
I am not entirely happy with what the Financial Secretary has said. It appears that because the past rules of the pool did not comply with what has just been laid down, the Customs and Excise is trying to claw back duty on the 2d. The right hon. Gentleman shakes his head. I only hope that that is true, and—

§ Mr. Alexander W. Lyon (York)
He has said it.

§ Mr. Cooke
With respect, he has not said it. He has said that it will be all right in the future provided that the rule is all right, but it is the past with which we are concerned—

§ Mr. Harold Lever
I have said this more than once, but it does not seem to have got home to hon. Members opposite or to the hon. Member for Bristol, West (Mr. Robert Cooke). I have said that the 2d. is no longer in question. The hon. and learned Member for Northwich (Sir J. Foster) has my point. This has been accepted as being free from any pool betting duty.

§ Mr. Cooke
I hope that the right hon. Gentleman's statement means that the 2d. subscribed in the past are all right, because it is about those that we are concerned. It is no good the right hon. Gentleman looking entirely surprised—the whole thing has been quite confusing from the very beginning of the discussion.
We are happy to know that if the rule is written in the way suggested by the right hon. Gentleman things will be all right in the future, but, as I see it, in the light of the letter which was read 693 out by my hon. and learned Friend the Member for Northwich (Sir J. Foster), there was a chance that the Customs and Excise would try to claw back duty on the 2d. proportion of the money being sent to the pool. We may have to return to this matter again at the earliest opportunity if we find that the Customs and Excise, in pursuing, as the Revenue pursued in the past, the duty on that part of the subscription which is a straight contribution to the pool, is also going after this 2d. contribution designed to help the spastics. I am still not happy about that, and I am not at all sure that my hon. Friends are happy about it either.
I got the impression from what the right hon. Gentleman said that in order to be absolutely in the clear there had to be a rule which said, "You can enter a 1s. stake in the pool, and 2d. will go to the spastics, but if you like you like you need send only 10d. and provide nothing for the spastics at all." It would seem that the right hon. Gentleman by that rule envisages a right to contract out. People did not seem to realise that they had a chance to contract out in the past, and I hope that it will not occur now. I am not the only person who does not understand this rule: some of my hon. Friends also seem still to be worried about it. Our only hope that things will be all right. If they are not, we shall have to return to this matter at the earliest opportunity.

§ Sir Brandon Rhys-Williams (Kensington, South)
If the Financial Secretary had any idea how much this means to some of the most helpless people in the world, he would not equivocate to the House as he is now doing. I have here the letter of 15th May from the Customs and Excise to Regional Pool Promotions Ltd. It reads: In reply to your letter of 7th March, I am directed by the Commissioners of Customs and Excise to inform you that duty is payable on the donation unless you and Regional Club Organisation Ltd., or either of the two companies can point to a rule which indicates that it is made voluntarily. It is difficult for these people to do any such thing.
If the matter is brought to the courts, the Spastics Society, for whom I had the honour to work some years ago, is satisfied that it can produce an adequate defence, but it has just had the ex- 694 pense and anxiety of several years of litigation, and it fears that it may have to face a further action of this kind. Will the Financial Secretary say categorically that that letter was written under a misunderstanding, or will he clarify the point now at issue by accepting one of our three variants, any of which would make the matter quite clear?
I recommend new Clause No. 34, because it would make it plain that whether or not the Customs and Excise is right in reading this Section in the 1964 Finance Act as it has done, Parliament does not wish this vendetta against the spastics to be pursued any further. I therefore ask him to give us a decision.
The reason for our doubt is the emphasis which the right hon. Gentleman placed again and again on the word "voluntary". I am certain that the 4 million people who take part in the, pool know very well that the money which is intended for the spastics goes to the spastics; and no doubt they join the pool because they are happy that the money should go to the spastics. They will be extremely concerned if this point is pressed home, and £½ million a year, plus, perhaps, £½ million retrospectively, is taken by the Treasury. I repeat, the Financial Secretary would not equivocate if he had any idea of what this means to some of the most helpless people in the world.

§ Mr. Maurice Macmillan
Perhaps I can clear the ground a little by saying that I accept what the Financial Secretary has said about what happened in the past in the light of the House of Lords decision. I fully accept also that it was the intention that the whole contribution made to charity in the course of pool betting by the public should not be subject to pool betting duty, That being so, I find it difficult to appreciate why the right hon. Gentleman will not accept our new Clause. It seems to me that the terms of the Act as it now stands could well be construed to mean that had the Customs and Excise proceeded with its case it could well have won it.
The Financial Secretary made great play with the word "voluntary". So did the Customs and Excise in writing to the Spastics Society. But in no part of the Finance Act, 1964, nor in the letter 695 which, in a different capacity, I wrote about the Act, did the question of voluntary contribution come in. It is quite clear from the letter of 9th June, 1964, that the intention was that the whole contribution which went to the charity should be exempted from duty, and nothing else. We accept that.
The right hon. Gentleman has said that the only way in which one can identify the meaning of the words in the Act about payments made for the purpose of charity by persons making bets was to say that the sums must be defined in the rules of any charitable society as being voluntary payments. Can the right hon. Gentleman reassure the House that the Spastics Society will not have to pay any more duty in respect of these contributions? Here we are not concerned only with the spastics. Does this rule mean that all such contributions are safe? In the course of his argument, the Financial Secretary said that the Customs and Excise had found it hard to believe that any contribution of 2.7d. was charity. It seemed that the argument turned on whether they were the sort of people who would decide in advance to give to the Society.
We must be certain that when any person takes part in this type of pool betting, where there is a defined prior undertaking that a proportion of the total amount sent each week by an individual goes to a charity, that proportion is deemed to be a voluntary contribution. What makes it voluntary is the knowledge of the society and the promoters and the person contributing beforehand that some proportion of that total stake is irrevocably and irretrievably going to the charity concerned. If that is what the Financial Secretary means, we can be happy about it, but if it means that the burden of proof of a voluntary intent is on either the society or the individual, we are not happy about it.
My limited experience of Customs and Excise is that the Department is properly reluctant to impose any form of taxation of motive. If it can be said that in this case any bet which goes irrevocably each week would have a proportion of the total, which may be 2.63d., laid down beforehand and there is no escaping that it is deemed to be a voluntary contribution, I cannot see why the Financial Sec- 696 retary cannot accept one of these new Clauses. Will he also say that he will look into the question of whether the actual working of the proviso in Section 7(2) of the 1964 Act cannot be taken in any other way? It is not a question of whether he wants to take it another way or of the Economic Secretary wanting to take it in another way, but whether it can be taken in another way. Can he make certain that that is the only way in which it can be interpreted?

§ Mr. Harold Lever
May I, with the leave of the House, make a last attempt to clear up points which have troubled hon. Members. On the question of voluntary payment, this is the Customs way of trying to use popular language to differentiate between payment made by persons making bets which are not payments without which the bets cannot be made. The Customs are trying to implement the Act. It is not irrevocability which determines it, but the wording of Section 7(2). I shall certainly give some thought to seeing if we can put it in popular language so that there is no misunderstanding.
The hon. Member for Bristol, West (Mr. Robert Cooke) thought that I was equivocating, but I thought I had made it clear and there was certainly not any equivocation. It may have been stupidity or obtuse language of mine, but I want the House clearly to understand that there is no question whatever, and never has been, over Spastic Society contributions in the past years—[Interruption.] The hon. Member for Kensington, South (Sir B. Rhys Williams) is waving letters at me. I do not think they are letters addressed to the Spastics Society but to the Top Ten Promoters. The Spastics Society over the years has had a number of contributions. There is some suggestion that we are claiming duty and, what is more, backdated duty, but that is out of the question. There is no question of that, and never has been.
The hon. Member for Kensington, South must stop waving something at me which I cannot read from this distance. No doubt it has a potent force on his emotions, but it cannot have force on my intellect because I cannot read it at this distance. There is no question, and never has been, of a back-dated decision requiring £2½ million or so from the Spastics Society in respect of past donations. If 697 that is not clear, I do not know what can be clear. We do not claim, and have not claimed, anything in respect of the payments, 2.7d. or not.
Customs and Excise thought it rather an odd fragmented sum to qualify within the Section 7(2) provision and went into the question. The Department has since discovered that this is perfectly all right and entirely within the Section 7(2) provision and no question of duty arises on it at all. As to the past, I assert that there never has been a problem, and there will not be a problem. The Customs and Excise are now completely satisfied that these contributions are volunary, that is, they conform to Section 7(2). We need net quibble about what "voluntary" means. The Customs are completely satisfied that they conform with Section 7(2) of the Act and hence are completely free from any question of pool betting duty.
If any hon. Member still thinks there is cause for anxiety—[HON. MEMBERS: "Yes."] I cannot waste more time of the House repeating that neither the past contributions nor the present ones are to be subjected to full betting duty.

§ Mr. Higgins
Will the right hon. Gentleman reassure us on one particular point? Is he saying that there is no liability whether or not the society is concerned as there is no rule showing that the matter is voluntary? That is the point in the letter from the Customs and Excise which is causing anxiety.

§ Mr. Lever
This has nothing to do with the rules of the society but is simply a question of the basis on which the payments are made. Do they conform to Section 7(2) or not? These do, we have now decided. The hon. Member and other hon. Members appear to believe that this litigation has been between the Customs and the Spastics Society, but that is absolute nonsense. It has been between the Customs and commercial pool promoters. There is no litigation of any kind between the Customs and the Spastics Society, and I certainly hope there will not be.

§ Mr. Higgins
The letter was written to the Regional Pool Promotions Limited and said: I am directed… to inform you that duty is payable on the donation unless you and Regional Club Organisation Limited or either of the two companies, can point to a 698 rule which indicates that it is made voluntarily. Does the right hon. Gentleman say that it was a mistake to write that letter?

§ Mr. Lever
No. This is not a rule of the Spastics Society but as part of the commercial group. That letter was written to that part of the promoters' commercial group. What we wanted to know was that the donations were collected in the manner statutorily provided. We used the word "voluntarily" and satisfied ourselves not that the Spastics Society but this commercial promotion company has collected the money in terms which comply with Section 7(2). That being the case, the payments are and will remain completely free from pool betting duty.

§ Mr. Geoffrey Hirst (Shipley)
I have great respect for the Financial Secretary and I know that he is trying to help the House, but I believe that the Society will suffer. If the burden of proof is so plain and the society could not point to the fact that there is a rule to get it out of difficulty, technically whether it is pursued or not begs the question and according to the letter the proportion which the society gets will become taxable.
There are only two ways in which the right hon. Gentleman can get the House out of its difficulty. He could either accept one of the new Clauses which would put the matter right, or he could say that the Customs and Excise wrote that letter in error.

§ Mr. Harold Lever
indicated dissent.

§ Mr. Hirst
The House cannot trust the validity of the right hon. Gentleman's argument. He has been in this House for a long time, and so haw I. He knows that Treasury interpretations mean absolutely nothing. They do not impress me in the slightest. I have heard many in my time which did not mean a thing. The right hon. Gentleman has responsibility for the Board of Customs and Excise. It cannot interpret the law; that is for the courts to do. If the Customs and Excise were wrong or there is no purpose—

§ Mr. Harold Lever
rose—

§ Mr. Hirst
No, I will continue what I wish to say. The right hon. Gentleman cannot expect the House to accept that 699 this argument will put at rest the minds of societies in the future. He has done nothing to assure the House in consequence.